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Steve Pickett became the CEO of RigNet, Inc. (NASDAQ:RNET) in 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Steve Pickett’s Compensation Compare With Similar Sized Companies?
Our data indicates that RigNet, Inc. is worth US$190m, and total annual CEO compensation is US$2.0m. (This number is for the twelve months until December 2018). Notably, that’s an increase of 32% over the year before. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$492k. We examined companies with market caps from US$100m to US$400m, and discovered that the median CEO total compensation of that group was US$1.1m.
As you can see, Steve Pickett is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean RigNet, Inc. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at RigNet, below.
Is RigNet, Inc. Growing?
On average over the last three years, RigNet, Inc. has shrunk earnings per share by 44% each year (measured with a line of best fit). Its revenue is up 15% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has RigNet, Inc. Been A Good Investment?
Since shareholders would have lost about 32% over three years, some RigNet, Inc. shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared total CEO remuneration at RigNet, Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.Earnings per share have not grown in three years, and the revenue growth fails to impress us.
Arguably worse, investors are without a positive return for the last three years. Notably, the CEO remuneration is actually up on last year. In our opinion the CEO might be paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at RigNet.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.